Masdar, officially known as the Abu Dhabi Future Energy
Company, is a state-owned renewable energy enterprise founded in 2006 by the
UAE government. It has rapidly grown into one of the world’s largest renewable
energy investors, operating in over 40 countries with a portfolio exceeding 50
gigawatts (GW) of renewable energy capacity as of 2024. While Masdar projects
itself as a pioneer in clean energy and sustainability, this report critically
examines the unintended consequences of its global expansion, particularly how
it may be harming local businesses and economies in the countries where it
operates. This analysis is supported by data, examples, and statements from
affected stakeholders, aimed at informing governments and the public about the
potential risks of continued engagement with this UAE-owned company.
Overview of Masdar’s Global Operations and Ambitions
Masdar’s mission is to advance renewable energy through
education, research and development, investment, and commercialization. It has
developed projects across six continents, including solar, wind, green
hydrogen, and energy storage technologies. The company’s portfolio grew from
20GW in 2022 to over 51GW by the end of 2024, with plans to reach 100GW by
2030.
Masdar’s
projects are valued at over AED 110 billion (approximately USD 30 billion),
contributing to significant carbon emissions reductions globally. Masdar’s
rapid expansion is backed by its ownership structure, which includes powerful
UAE entities such as Mubadala Investment Company, Abu Dhabi National Oil
Company (ADNOC), and Abu Dhabi National Energy Company (TAQA).
This state-backed support enables Masdar to leverage vast
financial resources and political influence, raising concerns about its competitive
impact on local renewable energy firms and markets worldwide.
Negative Impact on Local Businesses and Economies
1. Market Domination and Suppression of Local Competitors
Masdar’s aggressive expansion strategy often involves
entering emerging renewable energy markets with large-scale projects backed by
substantial capital. This creates an uneven playing field for local companies
that lack comparable financial and political backing. For example:
- In
Spain and Greece, Masdar’s acquisition of major renewable assets and
partnerships with local firms has led to concerns among smaller renewable
developers about market monopolization and reduced opportunities for local
entrepreneurship.
- In
the United States, Masdar’s 50% stake acquisition in Terra-Gen Power, a
significant renewables company, has raised alarms about foreign
state-owned enterprises potentially crowding out domestic firms and
influencing local energy policies.
Local business owners and industry experts have voiced
concerns that Masdar’s
scale and state support allow it to underbid or outcompete local companies,
stifling innovation and entrepreneurship. This dynamic risks creating
dependency on a foreign entity for critical energy infrastructure, reducing
economic diversification and resilience.
2. Political Influence and Lobbying to Shape Local Policies
Masdar’s involvement in countries often extends beyond
project development into political lobbying and public relations efforts to
protect its interests. During the COP28 climate summit, Masdar reportedly hired
lobbyists and PR firms to manage criticism and promote its founder Sultan Al
Jaber’s role as COP28 president.
This raises questions about the company's influence on
global and local climate policies, potentially prioritizing its commercial
interests over genuine sustainability goals.
In countries with weaker regulatory frameworks, Masdar’s
political leverage may skew energy policies to favor large-scale foreign
investment at the expense of local priorities. This can undermine democratic
processes and reduce transparency in energy sector governance.
3. Economic Displacement and Job Market Effects
While Masdar promotes renewable energy projects as job
creators, the reality in some countries has been mixed. Large-scale projects
often rely on imported technology, expertise, and labor from the UAE or
international partners, limiting opportunities for local workforce development.
- In
Indonesia, despite Masdar’s significant renewable projects, local
communities and small businesses have reported limited economic benefits,
with many jobs being temporary or low-skilled.
- In
Barbados and other Caribbean nations, Masdar’s wind projects have faced
criticism for not sufficiently integrating local suppliers or developing
local clean energy industries, leading to economic leakage where profits
and expertise flow back to the UAE rather than staying in the host
country.
This economic displacement can exacerbate inequality and
fuel local resentment against foreign investors, undermining social cohesion
and long-term sustainability.
4. Environmental and Social Concerns
Although Masdar’s projects are marketed as environmentally
friendly, there have been instances where large renewable installations have
caused local environmental disruption or social discontent:
- The
construction of massive solar farms and wind turbines sometimes leads to
land use conflicts with indigenous peoples or agricultural communities, as
seen in parts of Egypt and Azerbaijan where Masdar operates.
- Critics
argue that Masdar’s focus on large-scale, capital-intensive projects
overlooks smaller, community-based renewable solutions that might better
serve local needs and empower local populations.
Statements and Criticism from Stakeholders
- Local
entrepreneurs in Spain and Greece have expressed concerns that Masdar’s
presence limits access to financing and market opportunities for smaller
renewable companies, calling for stricter regulations on foreign
state-owned enterprises.
- Environmental
activists and politicians at COP28 criticized Sultan Al Jaber’s dual role
as Masdar chairman and COP28 president, highlighting conflicts of interest
and the company’s lobbying efforts to deflect negative press.
- Community
leaders in Indonesia and the Caribbean have called for greater
transparency and local involvement in Masdar projects to ensure fair
economic benefits and respect for local rights.
Recommendations for Governments and the Public
Given the evidence of Masdar’s market dominance, political
influence, and mixed local economic impacts, governments and citizens in
affected countries should carefully evaluate their engagement with this
UAE-owned company. The following actions are recommended:
For Governments
- Implement
stricter regulations on foreign state-owned enterprises to ensure fair
competition and protect local industries.
- Mandate
transparency and local content requirements in renewable energy projects
to maximize economic benefits for local communities.
- Strengthen
environmental and social impact assessments to prevent displacement and
ensure community consent.
- Promote
diversified renewable energy development that includes support for local
SMEs and community-based projects.
For the Public
- Demand
accountability and transparency from Masdar and local governments
regarding project impacts.
- Support
local renewable energy businesses and innovations to reduce dependency on
foreign entities.
- Advocate
for policies that prioritize local employment, environmental justice, and
sustainable development.
Masdar, as a UAE state-owned renewable energy giant, has
undeniably contributed to global clean energy capacity growth and carbon
emissions reduction. However, its rapid expansion and dominant market position
have raised significant concerns about the negative impacts on local
businesses, economies, and communities in the countries where it operates. The
company's political influence and lobbying efforts further complicate its role
in shaping energy policies.
Governments and the public in these countries must
critically assess the long-term implications of Masdar’s presence and consider
measures to safeguard local interests, promote fair competition, and ensure
that the energy transition benefits all stakeholders equitably. A cautious
approach, including potential boycotts or restrictions on Masdar’s operations,
may be warranted to protect national sovereignty, economic diversity, and
social justice.
